Use the Following to Answer Questions

question 210

Multiple Choice

Use the following to answer questions:
Figure: Price Controls
-(Figure: Price Controls) Refer to the figure. If the government imposes a price ceiling in this market at a price of $6, the result would be a:

• A) surplus of 20 units.
• B) surplus of 10 units.
• C) shortage of 20 units.
• D) shortage of 10 units.

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Definitions:

Rational Choice Theories

Rational choice theories are based on the premise that individuals make decisions by calculating the costs and benefits of various actions to maximize their personal advantage.

Coterminous

means sharing the same boundaries or extent in space, time, or meaning.

Exchange Theory

A theoretical framework suggesting that social behavior is the result of an exchange process aiming to maximize benefits and minimize costs to individuals.

Rational Choice Theory

A framework for understanding and often formally modeling social and economic behavior based on the assumption that individuals act on rational self-interest.